Grand Rapids, Detroit, Lansing and Kalamazoo all have investors who buy and renovate with short-term money. A DSCR rate-and-term refinance replaces that loan with long-term debt qualified on the rent.
In short: Yes, LendingStreet finances DSCR rate-and-term refinances on 1-8 unit investment properties in Michigan, up to 80% LTV on some programs, qualified on the property's rent with no W-2s or tax returns. The new loan pays off your existing hard money, bridge or higher-rate loan plus closing costs, with only a small amount of cash back allowed on most programs. Our investor loans are business-purpose loans on non-owner-occupied property, starting at $150,000 with a 620 minimum credit score. In Michigan, the higher non-homestead tax rate on rentals and local rental certification are the items to check early.
In a rate-and-term refinance, the new DSCR loan retires your existing debt and nothing more, apart from closing costs and, on most programs, a small amount of cash back. You are changing the price and shape of the debt, not the amount of equity you hold.
Leverage can reach up to 80% LTV on some programs, compared with up to 75% on a cash-out. The loan qualifies on the property's rent, not your W-2s or tax returns. The ratio of rent to the full new payment, including taxes, insurance and HOA dues, needs to be at least 1.0x on standard programs.
Michigan rental stock includes brick bungalows and colonials in Detroit and its suburbs, older frame homes and duplexes in Grand Rapids, Lansing and Kalamazoo, and newer suburban homes. Investors buy with hard money, renovate and refinance. Rate-and-term also helps investors exit a land contract or short-term bank loan with a fixed 30-year payment.
Rate-and-term is also the cleaner choice when the property's rent only modestly exceeds the payment. Adding cash-out raises the balance and lowers the ratio, while a rate-and-term keeps the debt where it is and focuses on better terms.
Short-term loans are interest-only and come due quickly, which works during a rehab but not for a long-term hold. A rate-and-term DSCR refinance replaces that debt once the property is stabilized and leased.
Timing matters. Lenders consider how long you have owned the property when deciding whether to use the new appraised value or your cost basis, and that rule varies by program. Order the appraisal early and keep invoices and receipts for the work you did.
Michigan charges state and county transfer taxes on deeds, which apply to sales rather than a standard refinance, and there is no mortgage tax. Refinance costs are mostly recording, title, appraisal and lender charges.
If you move title into an LLC as part of the refinance, transfer tax and a property transfer affidavit can apply, and the transfer can affect the property's taxable value. Check with the title company first.
Michigan rentals do not get the principal residence exemption, so they pay a higher school operating millage than homes owners live in. Taxable value can also uncap after a sale. Use the current non-homestead bill in the DSCR math.
Detroit requires rental registration and a certificate of compliance, and Grand Rapids, Lansing and other cities have their own rental certification programs. Lenders may ask for current certificates. Older homes may need roof, electrical or plumbing updates for insurance.
This example is illustrative and not a quote. An investor owns a up-and-down duplex in Grand Rapids appraised at $330,000. The existing hard money loan used for the purchase and renovation has a payoff of $240,000, costs about $2,150 a month interest-only and matures in 3 months. Rent is $2,700 a month, and taxes, insurance and any HOA dues run $560 a month.
Rolling about $7,000 of closing costs into the loan gives a new balance of $247,000, or about 74.8% LTV, inside the 80% ceiling some programs allow. On a 30-year term, principal and interest is about $1,685, so the full payment is about $2,245 and the DSCR is about 1.20x. The short-term maturity is gone and the payment is fixed. The rent could fall by about $455 a month before the ratio hit 1.0x.
| Item | Amount |
|---|---|
| Appraised value | $330,000 |
| Existing loan payoff | $240,000 |
| Closing costs rolled in | $7,000 |
| New loan amount | $247,000 |
| Loan-to-value | 74.8% |
| Principal and interest (30 years) | About $1,685 |
| Taxes, insurance and HOA | $560 |
| Total monthly payment | About $2,245 |
| Monthly rent | $2,700 |
| DSCR | About 1.20x |
The two refinances use the same DSCR underwriting, but the limits differ. Here is how they line up on a typical 1-8 unit rental.
If you are unsure which fits, ask for a quote on each. The difference in loan amount, payment and DSCR on the same Michigan property usually makes the choice clear, and the form below can request either.
| Feature | Rate-and-term | Cash-out |
|---|---|---|
| Purpose | Pay off existing loan and costs | Pay off loan and take equity |
| Maximum LTV | Up to 80% on some programs | Up to 75% |
| Cash at closing | Small allowance, varies by program | Up to the LTV limit |
| Minimum DSCR (standard) | 1.0x | 1.0x |
| Minimum credit score | 620 | 620 |
| Income documents | Rent only, no W-2s or tax returns | Rent only, no W-2s or tax returns |
Grand Rapids and its suburbs have strong rental demand and moderate prices. Detroit and suburbs such as Warren, Dearborn Heights and Southfield offer a range of single-family rentals. Lansing, Kalamazoo and Ann Arbor have university demand, and Flint and Saginaw have lower prices. Lakeshore towns have vacation rental markets with local rules.
Most delays come from missing paperwork. Pull these together before you request a quote. Call (877) 298-1001 or use the form below to get a quote.
Yes. LendingStreet refinances non-owner-occupied 1-8 unit rentals in Michigan with DSCR loans starting at $150,000, up to 80% LTV on some programs.
Michigan transfer taxes apply to deeds, so a standard refinance usually avoids them. Moving title into an LLC can change that and may affect taxable value.
Most programs allow a small amount of cash back at closing, but the limit varies. Taking more turns the loan into a cash-out refinance, which has a 75% LTV ceiling.
Rentals do not get the principal residence exemption, so they pay a higher school millage. The DSCR uses the rental tax bill.
Seasoning varies by program. Recently purchased properties may be sized on purchase price plus documented improvements rather than the new appraised value.
Detroit requires rental registration and a certificate of compliance, and lenders may ask for it. Having it current helps the file move.
Standard programs need at least 1.0x. Sub-1.0 DSCR programs exist, or you can lower the balance by bringing cash to closing.
No. The loan qualifies on the property's rent, not your personal income. You still need a 620 or higher credit score, reserves and entity documents if the property is in an LLC.
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